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Comment by frgtpsswrdlame | Hacker News Reader

About inflation - cash transfers are going to trigger inflation, the question is does a UBI raise inflation enough to erode the UBI itself? There's basically no evidence that a cash transfer program like that is going to raise inflation enough to erode it. Here's a study I found this study, it talks about price effects of cash give-away, they're existent but marginal.

https://www.povertyactionlab.org/sites/default/files/publica...

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Thank you for the study.

That's exactly my worry: not that it causes inflation, but that if everyone is given a sum to cover the cost of accommodation then accommodation prices will just get pushed up to beyond the reach of UBI. As I say, I like the idea of UBI a lot, so will be very glad if that doesn't happen, and interested to read (later on) this and any other studies on this topic!

Note that the UK already has a system of housing benefit which covers (most of) the cost of accomodation for people on low incomes. That may be a separate issue.

Housing benefits would have to be eliminated to make UBI viable cost-wise -- and indeed that is one of the biggest reasons why UBI or negative income tax as a replacement to benefits is politically unpopular.

While UBI would be more efficient (everybody gets a minimum amount of money that they can use towards housing or whatever else), that would mean HUGE losses among the welfare recipients in expensive places -- in London, housing benefit (LHA) can amount to $18k a year for a small family or $30k a year for a big one, and UBI will not fully replace that. The laments about social cleansing will be loud.

Think about it this way: from the perspective of inflation increases it doesn't matter whether people are getting money from the private sector or public. If inflation always worked to offset increases in income then society would never become better off. Obviously this isn't the case so inflation must be less than perfectly offsetting, how much less can still be disputed though.

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